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Hey, President Obama: Tips for your stock portfolio

The White House just released President Obama's financial disclosures May 15, highlighting what he is worth and where he puts his money. Jeff Reeves has some investing and money-management ideas for Obama.

The White House just released President Obama's financial disclosures May 15, highlighting what he is worth and where he puts his money. If I could be so bold, I'd like to offer some financial advice to our Commander in Chief on how he could command a little bit better results from his investment portfolio and personal finances.

So pull up a chair, Mr. Obama, and let's chat if you have a minute or two.

For starters, you're doing a lot of things right. You're much better off than many Americans. You might be a bit nervous since your current contract is up in 2016. But don't sweat it because you have some marketable skills, based on what I see.

For instance, your book royalties are impressive, and I sense a second career here. Dreams from My Father generated $100,001 to $1 million last year according to your disclosure — as did Of Thee I Sing: A Letter to My Daughters, though you graciously donate the after-tax proceeds to a scholarship fund to benefit children of fallen and disabled soldiers. On top of that, Audacity of Hope racked up $50,001 to $100,000 in 2012 royalties.

Anything happen in the last few years that might warrant another book? No rush, but think it over.

Now, on to retirement planning. At 31, you started saving for retirement as an instructor at the University of Chicago. That's a very early head-start on retirement compared with many other Americans. The sooner you start saving the better, since it gives you more time to grow your money and take advantage of compound interest. You can afford to be a bit more aggressive with your investments with so much daylight until retirement.

So way to think ahead, 44.

I am most impressed by your focus on low-cost index funds in your investments. Some guys think they are smarter than Wall Street and waste a lot of time and money picking stocks and paying high fees … only to make less money in the long run.

Not you. Your disclosure shows two positions in the Vanguard 500 Index fund worth $100,001 to $250,000 each, and a third position at $50,001 to $100,000.

The "admiral" class of the Vanguard 500 Index mutual fund charges just 0.05% in expenses — or a measly $5 for every $10,000 invested. And it's diversified across the entire Standard & Poor's 500-stock market index, which owns 500 of the largest American companies.

Nice work. I wish other investors would follow your lead here.

Of course, everyone can improve. So if I may be so bold, Mr. President, here are some items to talk over with Michelle — and, of course, your financial adviser.

For starters, why haven't you refinanced your Illinois home yet? According to your filing, your 2005 mortgage has a 5.625% interest rate. That's like twice what you'd qualify for as a responsible borrower. Currently, 15-year mortgages are around 2.8%, and a 30-year fixed is only 3.7%.

Save yourself some interest. The house is worth between $500,001 and $1 million, so this isn't chump change.

Also, refinancing means your next year of payments will be mostly mortgage interest, which is tax-deductible.

Next, on to your retirement strategy. While I applaud your focus on the S&P index fund, I am a bit shocked to see such a huge portion of your portfolio in U.S. Treasuries.

You're getting gray, sure, but you have enough years left that you don't have to be wholly in capital preservation mode just yet. Yes, U.S. government debt remains the safe haven of the world, but you missed out on quite a rally in the stock market by accepting low returns with these low-risk investments.

Specifically, your single biggest position in your disclosure is $1 million to $5 million in Treasuries. Sure, it generated $5,001 to $15,000 in income last year — but the stock market is up handsomely. Simply rotating some of that cash into your Vanguard fund would have netted a much bigger gain.

Anyway, I don't mean to harp. On the whole, I am very impressed with your financial planning here.

One other great item in your disclosure worth noting is your participation in 529 savings plans for your kids — the equivalent of an IRA that is earmarked for college. It is a great move for any parent with bright daughters like yours.

But hey, I don't have to tell you that you shouldn't take anything for granted when it comes to finances, right? You have to keep your eye on the ball.

Talk things over with Michelle. And let me know if you need an editor when your current gig ends and you think about pursuing that book thing seriously.

Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor's Guide to Finding Great Stocks.